Friday, October 30, 2020

Air Botswana Czypionkagate

Nico Czypionka, the man heading negotiations between the government and SA Airlink, convinced the Botswana government to go into a strategic partnership with the South African Airline as far back as April 2006 and other interested airlines were only invited to submit bids for the privatization of Air Botswana weeks later, apparently to create a false impression that there was fair and competitive bidding ÔÇô The Sunday Standard can reveal.

The Sunday Standard can further reveal that SA Airlink CEO, Roger Foster, wrote the blueprint for Air Botswana privatization which is being used by the Botswana negotiation team in their negotiations with the South African airline although it goes against the Air Botswana Privatization Policy of 2003.

The Sunday Standard investigations have turned up documents prepared by Czypionka, then Director of the Business and Economic Advisory Committee (BEAC) Task Force, in collaboration with Roger Foster, CEO of SA Airlink, dated April 2, 2006 which was an unsolicited bid for a strategic partnership between SA Airlink and the government of Botswana.

Immediately after Czypionka had presented the SA Airlink unsolicited bid to Cabinet, the Minister of Works and Transport, Lesego Motsumi, announced the accelerated privatization of Air Botswana and a number of reputable international airlines were invited to submit tenders.

Czypionka, who had already won the government over to the SA Airlink deal, was drafted into the Air Botswana privatization Tender Evaluation Committee and the Air Botswana Privatization Reference Committee giving him a free hand to influence the bidding process.

Other reputable international airlines, which had shown interest in buying Air Botswana as envisaged by the Air Botswana Transition Act of 2003, however, pulled out of the privatization process and did not submit their bids because they allegedly felt that the process was stage managed and they were only called in to made up the numbers and legitimize the SA Airlink deal.

Among international airlines that withdrew their bids from the Air Botswana privatization were Ethiopian Airlines, Comair Ltd, a reputable South African courier, British Airways, ExecuJet Aviation Group, A Zurich Based air Charter Company, Inter Air South Africa and the Tourism Empowerment Group.

The Sunday Standard can further reveal that the airlines that were invited to bid for Air Botswana privatization had already been disqualified by Czypionka in the paper he had presented to Cabinet and were apparently invited to bid only to make up the numbers and legitimize the SA Airlink deal.

The “Concept paper for a Strategic Equity Partnership with the regional airline Airlink” penned by Czypionka and SA Airlink CEO, which has since become a blueprint for the Air Botswana privatization transaction, argues that “having analyzed all regional airline operations, only Airlink fulfils all the above requirements- others fail mainly on the criteria of suitable aircraft and networks ÔÇô or they are existing competitors. A marginal candidate would be British Airways/ Comair/Kulula, but this group operates only large jet aircraft, which are unsuitable for Botswana’s current requirements.”

The concept paper co-authored by Czypionka and the SA Airlink CEO paints a gloomy picture of Air Botswana and proposes four options to save the airline: Option One is the rebuilding of Air Botswana. The paper then goes on to dismiss this option as not viable.

Option Two is the strategic equity partnership with Airlink which is praised as the best option. Option Three is franchising and Option Four is closing down Air Botswana and not having a national carrier. The two options are also dismissed and the paper concludes that ‘there is a very substantial merit in pursuing Option Two ÔÇôStrategic Partner.’
“This option, if it can be achieved, would fulfill virtually all positive requirements, while not excluding the benefits from opening the skies.”

Indeed, from May 2007 any South African and Botswana Airline will be able to fly to and from any point between South Africa and Botswana, and Botswana may wish to fully open its skies even to airlines from other countries in the region.

The paper further states that “the great advantage of Option Two is that the “NewCo” Botswana flag carrier would be in a very advantageous position to meet this challenge, whereas a rebuilt Air Botswana, even with significant capital injection, will probably be very badly hurt by open competition.

After SA Airlink was chosen as the preferred partner in the Air Botswana privatization, Czypionka was then drafted into the Botswana government negotiating team. The concept paper, which forms the basis for negotiations between SA Airlink and the Botswana government, was penned jointly by Czypionka and the SA Airlink boss and indications are that up to now the negotiations have adopted the concept paper to the letter.

The concept paper, for example, proposed the liquidation of Air Botswana. Says the concept paper: The Government of Botswana “would sell its ATR42s and its one owned BAe146, with the leased BAe46 being renegotiated. Regarding the latter, SA Airlink would undertake to engage with BAE SYSTEMS to arrange the return of this BAe146 in exchange for a more modern, more efficient and more reliable RJ70.”

The government of Botswana “would use the proceeds of the sale of the aircraft and spares to fund its investment in Botswana Airlink, and tidy up the legacy housekeeping issues associated with the closure of Air Botswana.

South Africa Airlink “would provide the aircraft required to optimally operate the business, as required, from its fleet of J41 and RJ70 aircrafts.
After Parliament passed a motion stopping the privatization of Air Botswana, arguing that it violated the Botswana Privatization Policy, Czypionka again emerged as the chief spokesperson of the negotiating team and told the media that the parliamentary motion was not binding on Cabinet and could not stop the negotiation process. This is the position that has been adopted by Cabinet, resulting in an unprecedented standoff between the executive and the legislature.

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